Hard negotiations mark latest round of trade talks with EU

Indian ambassador to EU Dipak Chatterjee at a press conference to talk about the Kimberley Process in Brussels

Updated: Wed, Dec 12 2007. 10 52 PM IST

Brussels: Talks with the European Union (EU) on a free trade and investment agreement have seen “forward movement”, but India has said that while it will not erect any new trade barriers, it cannot be a one-way street and both sides face “difficult decisions” in future, Indian officials said.

Indian ambassador to EU Dipak Chatterjee at a press conference to talk about the Kimberley Process in Brussels

India and the 27-nation EU have been negotiating the ambitious broad-based trade and investment agreement since October and have set a deadline of end-2008 to seal the deal.

There was “seriousness, gravitas and a forward movement” during the latest round of talks, India’s chief negotiator Rahul Khullar said after the third round of negotiations concluded on Tuesday.

He said the trade and investment agreement between the two sides was the first of its kind between India and EU, and should be on acceptable terms. “It is not a one-way street,” Khullar said. “There has to be give and take.”

He said both sides had made initial offers on trade and goods. Khullar added India was committed to negotiate on matters that were “germane to trade and investment.”

Commenting on the discussions, Indian ambassador to EU Dipak Chatterjee said, “It was a cordial exchange, but included hard negotiations. Difficult decisions lie ahead and conclusions will be carefully weighed by both sides.”

Analysts said there can be rigid reluctance over non-tariff barriers on the European side. They say negotiations will be difficult because EU interests extend much beyond normal trading and investment. Tariffs were not the real issue, analysts said, adding non-tariff barriers such as labour, environment and technical standards will be the hard issues.

European trade officials want to deepen discussions on sensitive areas with India such as removing barriers to trade in services, intellectual property protection and public procurement, which they say are not transparent.

Khullar pointed to India’s willingness to tackle the technical barriers to trade and surveillance body issues and said India would not erect new trade barriers.

However, Khullar admitted there were issues where the progress had been slow, but said both sides were trying their best to resolve difficulties and hindrances.

Indian officials hoped the final agreement would be reached before 2008-end.

EU is India’s largest trading partner, accounting for one-fifth of the South Asian country’s total trade, and is also one of its most important sources of foreign investment.

The bloc is drawing up a web of free trade pacts in Asia to tap into the high growth potential of these economies. Khullar said the next round of discussions will be held in New Delhi in February.